Asian Stocks Decline; U.S. Treasuries Hold Drop: Markets Wrap

  • S&P 500 chalked 70th all-time high for 2021, Nasdaq 100 steady
  • Treasury yields rose; crude oil slips, dollar gauge steady

Asian stocks fell Thursday, failing to get a boost after U.S. shares edged up to another all-time high amid light volumes in the final days of the year. Treasury yields held an advance.

Japanese shares led the region lower and U.S. equity futures were in the red. The S&P 500 reached the 70th record close of the year on Wednesday, while the Nasdaq 100 was little changed.

The 10-year Treasury yield’s advance took it above its 50-day moving average for the first time in about a month. Australia’s 10-year bond yield jumped 10 basis points. A dollar gauge was steady and crude oil slipped.  

China’s battered property developers and regulatory crackdown are again in focus heading toward 2022. Some holders of two China Evergrande Group dollar bonds with coupons due Tuesday said they had yet to receive payment. 

Alibaba Group Holding Ltd. is in talks over a possible sale of its stake in Weibo Corp., a Twitter-like social media service, to a state-owned Chinese conglomerate. Beijing is moving to curb the influence of China’s tech giants in the media sphere. Alibaba and an index of Chinese shares slid in U.S. trading.

As the year draws to a close, investors are contemplating the implications of the fast-spreading omicron coronavirus variant, decreasing stimulus and elevated inflation stoked by supply-chain bottlenecks. Key questions include whether Treasury yields will push higher and how much impetus is left in the equity bull market. 

“Despite global surges in Covid cases, the markets are reflecting the new reality that Covid is here to stay albeit more on our terms than its,” Kevin Philip, managing director at Bel Air Investment Advisors, said in an email. Next year, “we are facing less of a Covid-influenced world, and a return toward normalcy,” he added. 

The coronavirus is unlikely to go away completely and will probably settle into a pattern of transmission at low levels, the World Health Organization said, warning of a “bumpy road” until then.

Chinese officials renewed their commitment to a zero tolerance approach to Covid-19 as they tackle a protracted outbreak in the western city of Xi’an. Micron Technology Inc. said output of some computer memory will be hit by the lockdown there. 

In geopolitical news, U.S. President Joe Biden plans to talk by phone with Russian President Vladimir Putin on Thursday as the U.S. and its allies raise alarm about Russia’s troop buildup on the Ukraine border.

Elsewhere, Bitcoin extended its December retreat, falling toward $46,000.

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